Mongolia A country with huge potential and challenging conditions
The country has successfully completed the transition from a communist people’s republic to a parliamentary democracy and a market economy. The mainstays of Mongolia’s economy are animal husbandry and the extraction of raw materials. Partly due to a drop in commodity prices Mongolia’s economic growth slowed for a certain time. The closing of borders to China because of the COVID-19 pandemic, trade restrictions and soaring fuel and food prices caused by Russia’s war of aggression against Ukraine made the economic and social situation worse. But things have begun to pick up again.
Development is also hampered by weak infrastructure, a shortage of skilled workers and widespread corruption. Rural areas in particular have not shared in the country's economic progress. The nomadic population and livestock farmers in particular, are threatened with the loss of their livelihoods as a result of increasing environmental degradation.
Mongolia is currently ranked 96th out of the 191 countries assessed in the United Nations Human Development Index (HDI).
German development cooperation with Mongolia
Development cooperation between Germany and Mongolia began in 1991/92, after the country underwent a political and economic transition. In spring 2020, the decision was taken to end bilateral cooperation in the medium term. At that time, Germany was the third biggest bilateral donor, after Japan and South Korea, and the most important European partner for Mongolia. In autumn 2022, bilateral development cooperation was resumed because of the changed global political situation and Mongolia’s increased challenges. It is focused on the following core areas:
- Conserving nature and natural resources, protecting life on Earth
Area of intervention: Biodiversity
- Sustainable economic development, training and employment
Area of intervention: Technical and vocational education and training (TVET)
- Climate and energy, just transition
Area of intervention: Energy efficiency
The Federal Ministry for Economic Cooperation and Development (BMZ) made a commitment of 24 million euros to Mongolia for cooperation in 2022.
SDG trends for Mongolia
- On track or maintaining SDG achievement
- Moderately improving
- Trend information unavailable